AAAS R&D Funding Update on R&D in NIH FY 2007 Senate Appropriations -

Senate Gives Small Increase to NIH

Go to: -Table 1. NIH R&D in FY 2007 Senate Appropriations -Table 2. Dept. of Health and Human Services R&D in FY 2007 Senate Appropriations PDF version of this document Main R&D in the FY 2007 Budget Page Supplemental Materials: "House Proposes Flat NIH Budget," AAAS R&D Funding Update on R&D in FY 2007 House NIH Appropriations "NIH Budget Remains Flat in 2007," AAAS R&D Funding Update on R&D in the FY 2007 NIH Budget AAAS Analysis of R&D in the FY 2007 Budget

Highlights - The Senate would add $201 million to the Bush Administration’s request for the National Institutes of Health (NIH), enough to keep NIH institute and center budgets flat instead of declining for the second year in a row. After falling for the first time since 1970 in 2006, the 2007 Senate appropriation would be a 0.7 percent increase for a total NIH budget of $28.8 billion (see Table 1). - The modest Senate increase would keep NIH well behind its own calculations of biomedical research inflation, estimated at 4.1 percent this year and 3.8 percent in 2007. The NIH budget would fall 10 percent from 2004 to 2007 based on these calculations, and nearly 5 percent based on economy-wide inflation. - All of NIH’s IC’s would see their funding increase between 0 and 1 percent, except for the Senate’s endorsement of a large proposed increase for the Office of the Director (OD). The OD budget would climb 30 percent or $160 million to reach $688 million in the Senate plan, to fund increases for the two NIH priorities of biodefense R&D and the NIH Roadmap for Biomedical Research. - NIH, the House, and now the Senate have all endorsed an NIH biodefense investment of $1.9 billion in FY 2007, an increase of $110 million or 6.2 percent in an otherwise lean NIH budget. The entire increase would go to OD for its Advanced Development fund (up $110 million to $160 million) to develop biodefense countermeasures. Other NIH biodefense funding, mostly in NIAID, would remain flat. Funding for the other key NIH priority, the NIH Roadmap, would increase dramatically by $113 million or 34.4 percent to $443 million in 2007. - NIH R&D funding, 97 percent of the total NIH budget except for training and some overhead costs, would gain $201 million or 0.7 percent to $28.0 billion (see Table 1) in the Senate appropriation.  - R&D in the other Department of Health and Human Services (HHS) agencies combined would fall 3 percent to $1.3 billion (see Table 2).  NIH R&D in FY 2007 Senate Appropriations On July 20, the Senate Appropriations Committee approved its version of the FY 2007 Labor-HHS appropriations bill (S 3708), which provides funding for the Departments of Labor, Health and Human Services, and Education. The bill funds R&D in the Department of Health and Human Services (HHS), including the National Institutes of Health (NIH). The House drafted its own version of the bill in June, but the House leadership has delayed a House vote on the bill until well into the fall. The full Senate is also unlikely to take up its version until the fall, leaving these appropriations in draft form for the next few months. While the House would approve NIH’s request calling for nearly all of NIH’s institutes and centers’ budgets to fall for the second year in a row, the Senate would add $201 million to the request to allow all NIH’s IC’s to at least receive flat funding in 2007. The Senate’s total appropriation for NIH would be $28.8 billion, $201 million or 0.7 percent above this year’s funding level (see Table 1). NIH classifies 97 percent of its budget as R&D, including R&D facilities. (The remainder is for overhead costs and research training.)  NIH R&D would total $28.0 billion next year in the Senate bill, again a 0.7 percent increase, in contrast to a slight cut in the House plan. (For details of the request for NIH, see Chapter 8 of AAAS Report XXXI: R&D FY 2007 or the Feb. 23 R&D Funding Update; for details of House appropriations for NIH, see the June 16 R&D Funding Update.) Figure 1. (click on the image for PDF)  After several years of gains, 2007 would be the third year in a row that NIH would lag behind inflation in the economy as a whole, projected at 2.2 percent next year (see Figure 1). The 2007 NIH Senate appropriation would be nearly 5 percent below the 2004 peak after adjusting for inflation. But NIH would fall even further behind in its own calculations of biomedical research inflation. NIH calculates a Biomedical Research and Development Price Index (BRDPI), an inflation index for goods and services purchased by the NIH budget. Recently, NIH projected the BRDPI increase for FY 2007 to be 3.8 percent after a 4.1 percent increase in 2006. In recent years, the BRDPI inflation rate has outpaced the economy-wide inflation rate by roughly 2 percent a year. Using BRDPI, the 2007 Senate appropriation would leave NIH with 10 percent less than the 2004 budget in biomedical inflation-adjusted terms. (AAAS and the federal government generally use the economy-wide GDP deflator to adjust R&D dollars for inflation.)  NIH Institutes in the FY 2007 Senate Appropriation  The NIH budget is actually appropriated in 26 separate budget accounts, roughly corresponding to NIH’s institutes and centers (IC’s; see Table 1). There are 20 institutes with separate budgets, along with four centers, an Office of the Director (OD), and a Buildings and Facilities account. There are three other centers that are not separately budgeted.  In the FY 2007 Senate appropriation, all the IC’s would see small funding increases between 0 and 1 percent, well behind inflation. Only the Office of the Director would get a large increase. But the Senate appropriation would be a slight improvement over the House and NIH plans calling for all but three IC’s to see their budgets fall for the second year in a row. The Senate appropriation would still leave most IC budgets below their 2005 levels.   Figure 2. (click on the image for PDF) Only the Office of the Director (OD) would see its budget increase significantly in 2007. The Senate would add $20 million to an already-generous request to bring the OD budget to $688 million, a 30 percent increase over this year after a similar increase in 2006. In both 2006 and 2007, the bulk of the increases would go to biodefense and other terrorism research. In 2006, OD takes over responsibility for a $47.5 million radiological and nuclear countermeasures portfolio from the Office of the HHS Secretary, and a $50 million biodefense countermeasures development fund from NIAID. The 2007 budget would add $110 million in new funds for the Advanced Development fund for biodefense countermeasures, bringing total OD investment to $160 million. The remaining increase would go to expand the NIH Roadmap for Medical Research (see below). Because of stagnant and declining funding in recent budgets and now for 2007, all NIH IC’s, except the Office of the Director, have lost ground significantly in inflation-adjusted terms (see Figure 2). Most institute budgets peaked in 2004 and have declined since then. The largest institute, the National Cancer Institute (NCI), would barely stay even at $4.8 billion in the Senate plan (up 0.1 percent). After factoring in (economy-wide) inflation, the NCI budget would be 6 percent below the 2004 funding level. The National Heart, Lung, and Blood Institute (NHLBI) would have $2.9 billion in 2007, a 5.6 percent inflation-adjusted loss compared to 2004. The other NIH institutes would see similar losses. Even NIAID, which received billions of dollars in additional funds in the aftermath of the fall 2001 anthrax attacks to become the second-largest NIH institute, has lost ground in more recent years with a $4.4 billion 2007 Senate appropriation, 5.1 percent below its 2004 budget in real terms. (The losses would be even greater if calculated with the biomedical research BRDPI inflation index.) The Office of the Director budget would double in real terms between 2004 and 2007 if the Senate appropriation prevails. The Senate bill would be mostly free of binding instructions for NIH on how to spend its funds, unlike the House bill. In a rare legally binding designation of funds, the House bill would mandate $69 million for the National Children’s Study in 2007 in a reaction against NIH’s proposal to eliminate funding. The multi-year study in the National Institute of Child Health and Development (NICHD) is currently in its early stages, but NIH proposed to end further work because of its tight budget situation and looming future costs of enrolling 100,000 children in the long-term study. The Senate bill does not mention the study, nor does it provide additional funds for NICHD. The Senate bill is also silent on whether NIH-funded researchers should be required to make their research papers freely accessible. The House version of the bill would require NIH-funded researchers to submit electronic versions of their final published research papers to NIH as soon as possible but no later than 12 months after publication, so that NIH-funded research results can be freely accessible to the public in NIH’s PubMed Central digital archive. The legally binding language follows non-binding report language in previous appropriations bills calling on NIH to make PubMed Central a central, open-access repository for all NIH-funded research findings. In response to the earlier language, NIH released a policy last year calling on all NIH-funded researchers to submit their manuscripts to PubMed Central after publication, but made submission voluntary. Apparently frustrated by the low percentages of researchers who have done so, House appropriators would make submission within a year of publication mandatory. It is unclear whether the House language will survive in the final Labor-HHS bill. NIH Funding Mechanisms From funding an average of 1 out of 3 grant applications earlier in the decade, NIH now expects to fund fewer than 1 in 5 applications. NIH projects a decline in the success rate for new grant applications for the sixth year in a row to 19 percent in 2006 and 2007, down steeply from a high of 32 percent in FY 2001 because recent surges in the number of applications have far outpaced the number of grants awarded. Several NIH institutes would see success rates well below the 19 percent NIH-wide average. The largest National Cancer Institute projects a decline to 16 percent in the 2007 budget. NIH Priority Areas NIH continues to expand funding for clinical research, high-risk basic research, new research tools, and multidisciplinary collaborative research in the NIH Roadmap for Biomedical Research. The total roadmap, after increasing from $240 million to $329 million within a declining total NIH budget in 2006, would increase another $113 million or 34.4 percent to $443 million in 2007 in the request and both the House and Senate appropriations. The Roadmap would continue to be managed in the Office of the Director, and OD would provide the largest single contribution with $111 million in 2007 (up 35 percent). The remaining Roadmap funds would come from a transfer of 1.2 percent of each IC’s budget (up from 0.9 percent in 2006), totaling $332 million (up 34 percent). Various parts of the Roadmap are then parceled out for selected IC’s to administer. Biodefense R&D continues to be the other expanding priority in the NIH portfolio. NIH would devote $1.9 billion for biodefense R&D in FY 2007, up $110 million or 6.2 percent from the current year. The entire $110 million increase would go to the Advanced Development fund in the Office of the Director (OD). The fund, which OD inherited from NIAID in 2006 at a level of $50 million, would increase to $160 million to develop new biodefense countermeasures which could eventually wind up in the Strategic National Stockpile for use after a terrorist attack. The additional funds would go primarily toward vaccines and treatments for anthrax and smallpox. Of the remaining biodefense portfolio, all except a small construction investment would go to competitively awarded research grants and contracts, mostly from NIAID. In addition to the biodefense investment, NIH OD would also receive $96 million for an R&D program on radiological and nuclear countermeasures. NIH would fund $114 million in R&D facilities and capital equipment in FY 2007, down slightly from the current year. Much of this funding comes from the Buildings and Facilities account, which would remain at $81 million in the House appropriation for 2007. The B&F appropriation funds intramural construction at NIH facilities, while in the NIAID appropriation there would be $25 million for extramural biodefense construction grants to finish several laboratories around the country. R&D in Other HHS Agencies Total R&D in the Department of Health and Human Services (HHS) would be $29.3 billion in FY 2007 under the Senate Labor-HHS bill, a slight increase of 0.5 percent after a cut in 2007 (see Table 2). NIH dominates the HHS R&D portfolio, but the rest of HHS (excluding NIH) would fund a still-substantial $1.3 billion in R&D in FY 2007, a cut of 3.0 percent.  Impacts of the NIH R&D Portfolio Although Senate appropriators tried to add more money to the NIH request, an extremely tight domestic spending allocation and steep proposed cuts in other parts of the Labor-HHS bill limited their generosity to a relatively modest $201 million add-on for NIH. The 2007 Senate appropriation, although more generous than the House, would still be a disappointment to biomedical research advocates who had hoped that the Senate could add funds to a flat 2007 request. Both the House and Senate appropriations would leave NIH with less money in real terms than in 2003, signaling a retreat from the funding levels reached in the NIH doubling campaign.  NIH alone now accounts for two-thirds of all federal support for R&D in colleges and universities.  A  majority of NIH R&D funds go to colleges and universities; because of the size of the NIH budget in comparison to other federal agencies, NIH is the dominant funding source for nearly all colleges and universities with medical schools. NIH’s intramural laboratories, mostly in Maryland, perform a fifth of total NIH R&D. Nearly 17 percent of NIH R&D goes to independent nonprofit institutions, including non-university research hospitals and medical research foundations; NIH provides two-thirds of all federal R&D funds to nonprofits. Because of budget cuts, universities and colleges and medically oriented nonprofits can expect falling federal R&D support in FY 2006 and 2007 after many years of gains.  Outlook and Next Steps  The future of both the House and Senate versions of the Labor-HHS bill are in limbo. Although both are ready for floor debate and eventual approval, Republican congressional leaders are wary of debating the bill before the November elections because of the tensions this bill causes each year between fiscal conservatives and Republican moderates, one group calling for steep cuts in its health and education programs and the other calling for billions in additional funding. Democratic attempts to attach a minimum-wage increase to the bill are another reason the Republican leadership would much rather postpone action on this bill until after the November elections. If, as expected, both chambers delay action on the bill until after the elections, it could be December before a final, compromise bill is approved. It could be months, then, before NIH and its constituencies receive any further signals on the agency’s final budget for 2007. (This analysis is one of a series of AAAS R&D Funding Updates on FY 2007 congressional appropriations. The complete series of AAAS R&D Funding Updates, including continually updated analyses of R&D in FY 2007 appropriations, is available on the AAAS R&D Web Site (http://www.aaas.org/spp/rd) in the “FY 2007 R&D” or the “What’s New” sections.) - July 25, 2006 AAAS R&D Budget and Policy Program 1200 New York Avenue, NW Washington, DC 20005 (202) 326-6607 AAAS R&D Web site: http://www.aaas.org/spp/rd

Table 1. National Institutes of Health
Senate Appropriations Committee Action on R&D in the FY 2007 Budget
(budget authority in millions of dollars)
				Action by Senate
	FY 2006	FY 2007	FY 2007	FY 2007	Chg. from Request		Chg. from FY 2006
	Estimate	Request	House	Senate	Amount	Percent	Amount	Percent
Cancer	4,793	4,754	4,754	4,799	45	1.0%	6	0.1%
Allergy and Infectious Diseases 1/	4,383	4,395	4,270	4,395	0	0.0%	12	0.3%
Heart, Lung and Blood	2,922	2,901	2,901	2,924	23	0.8%	3	0.1%
General Medical Sciences	1,936	1,923	1,923	1,935	11	0.6%	-1	0.0%
Diabetes, Digestive and Kidney 2/	1,855	1,844	1,844	1,858	13	0.7%	3	0.2%
Neurological Disorders	1,535	1,525	1,525	1,538	13	0.8%	3	0.2%
Mental Health	1,404	1,395	1,395	1,404	9	0.6%	0	0.0%
Child Health & Human Dev.	1,265	1,257	1,257	1,265	7	0.6%	0	0.0%
Research Resources	1,099	1,098	1,123	1,104	6	0.6%	5	0.5%
Aging	1,047	1,040	1,040	1,049	9	0.9%	2	0.2%
Drug Abuse	1,000	995	995	1,000	6	0.6%	0	0.0%
Environmental Health Sciences 3/	720	716	717	720	4	0.6%	-1	-0.1%
Office of the Director 4/	528	668	668	688	20	3.0%	160	30.4%
Eye	667	661	661	667	6	0.8%	0	0.0%
Arthritis / Musculoskeletal	508	505	505	509	4	0.8%	1	0.1%
Human Genome	486	483	483	486	3	0.7%	0	0.1%
Alcohol Abuse and Alcoholism	436	433	433	437	3	0.8%	1	0.2%
Deafness and Communication	393	392	392	395	4	0.9%	2	0.4%
Dental Research	389	386	386	390	4	0.9%	0	0.1%
National Library of Medicine	315	313	313	315	2	0.6%	0	0.1%
Biomed/Bioengineering	297	295	295	298	3	0.9%	1	0.3%
Minority Health / Disparities	195	194	194	197	2	1.3%	1	0.7%
Nursing Research	137	137	137	138	1	1.0%	1	0.4%
Complementary and Alternative	121	121	121	122	1	1.2%	1	0.4%
Buildings and Facilities	81	81	81	81	0	0.0%	0	0.0%
Fogarty International Center	66	67	67	67	0	0.2%	0	0.7%
	________	________	________	________	________		________
Total NIH Budget	28,578	28,578	28,479	28,779	201	0.7%	201	0.7%
subtract:
- Estimated Research Training	761	760	758	766	5	0.7%	5	0.7%
- Other Non-R&D	13	8	8	8	0	0.7%	-5	-37.7%
	________	________	________	________	________		________
Total NIH R&D	27,805	27,810	27,714	28,005	195	0.7%	201	0.7%
AAAS estimates based on FY 2007 appropriations bills.  Includes conduct of R&D and R&D facilities.
FY 2006 and FY 2007 request figures based on OMB R&D data and supplemental agency budget data.
Figures are rounded to the nearest million. Changes calculated from unrounded figures.
1/ Includes transfers to the Global Fund for HIV/AIDS ($99 mil. ''06; $100 mil. '07 request and '07 Senate).
The FY 2007 House appropriation does not include a contribution to the Global Fund.
2/ Includes $150 million each year in mandatory diabetes funds.
3/ Includes separate appropriations for Superfund-related activties.
4/ Includes funds formerly in Office of HHS Secretary for nuclear/radiol. countermeasures
July 25, 2006 - AAAS estimates of Senate Appropriations Committee action.
These figures may be modified or rejected by the full Senate.